It's Mine: How the Crypto Industry Is Redefining Ownership

By Steven Boykey Sidley

'Sidley explains clearly and persuasively how our rights and identities are being changed and challenged by technologies of our own making' Bronwyn Williams, futurist, economist partner at Flux Trends and Metanomic and author of The Future Starts Now

'Future historians may well look back on "It's Mine" and wonder at such a heuristic prescience gilded with clarity, style, and grace' Josh Rosenthal, US historian, podcaster, public intellectual, educator, serial entrepreneur

'It's Mine is a wonder: an easy to understand thrill ride into the endless possibilities borne by block chain. It’s a brave new world, but Sidley insists that we don’t need to be courageous in facing it, just open to the vistas it promises in the near future' Richard Poplak

‘Crypto’, a loose term that means many things to different people, only entered the public consciousness within the last five years or so, now evident by the volume of public discussion, commentary and analysis spread across every conceivable media outlet. Cryptography has been around for millennia, but Bitcoin only arose in 2009, and it was the spark that has taken crypto from a small group of enthusiasts into a many-tentacled creature, now attaching itself to an astonishing number of projects across all manner of applications, challenging both public and private power centres and long-established norms as it spreads. Starting with the emergence of cryptocurrencies, a whole new host of life-forms have emerged – NFTs, the metaverse, Defi, Web3 and DAOs – all of them changing the very notion of ownership.

It’s Mine digs into the history and concept of ‘ownership’, which ecosystems nurture it, and where we are now. Filled with anecdotes, observations and interviews, the book takes an entertaining and accessible look at how Bitcoin made its mark, how its technology is being re-purposed to enable a revolution, and (in non-technical terms) how it all works. It explores how these new crypto ‘life-forms’ will interact with the rest of the virtual and physical world, while making some very rich and some very poor.

• Language: English
• Publisher: Legend Press
• Release date: Aug 21, 2023
• ISBN: 9781915643520

Steven Boykey Sidley

Steven Sidley is one of South Africa's most prolific and respected literary fiction writers. He has written 4 novels including the award winning Entanglement, awarded the 2013 UJ Debut Prize. Stepping Out and Imperfect Solo were both shortlisted prestigious prizes. Leaving Word is his fourth novel.

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‘If you are what you own, then you should surely own this book. It will make you knowledgeable, charming and engaging. Sidley once again takes an incredibly complex, sprawling subject matter and demystifies it in a way that is still a great pleasure to read.’

Tracey Follows

Forbes Top 50 female futurist,

Visiting Professor in Digital Futures and

Identity at Staffordshire University,

author of The Future of You

‘It’s Mine directs our gaze toward the power of epoch-defining change while marking the course with the practical application of digital ownership. Future historians may well look back on It’s Mine and wonder at such a heuristic prescience gilded with clarity, style, and grace.’

Josh Rosenthal

Historian, podcaster, public intellectual,

educator, serial entrepreneur

‘Sidley explains clearly and persuasively how our rights and identities are being changed and challenged by technologies of our own making, and how, in turn, these changes could unravel and rewrite so many of the human constructs and necessary fictions – including money, citizenship, and property rights – we’ve held to be self-evident.’

Bronwyn Williams

Futurist, economist partner at Flux Trends

and Metanomic and author of

The Future Starts Now

‘I found Sidley’s different perspective on the crypto scene both thought-provoking and useful.’

David Birch

Senior Research Fellow, Kings College, London,

author of The Currency Cold War and

Before Babylon, Beyond Bitcoin

IT’S MINE

IT’S MINE

How the Crypto Industry

Is Redefining Ownership

Steven Boykey Sidley

Hero, an imprint of Legend Times Group LTD

51 Gower Street

London WC1E 6HJ

United Kingdom

www.hero-press.com

First published by Hero in 2023

© Steven Boykey Sidley, 2023

The right of the author to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988. British Library Cataloguing in Publication Data available.

Printed in Great Britain

isbn

: 978-1-91564-351-3

All rights reserved. No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of the publisher. This book is sold subject to the condition that it shall not be resold, lent, hired out or otherwise circulated without the express prior consent of the publisher.

Introduction

explanatory note

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

Chapter 8

Chapter 9

Chapter 10

Chapter 11

Chapter 12

Chapter 13

Chapter 14

Chapter 15

Chapter 16

Chapter 17

Chapter 18

Chapter 19

Chapter 20

Chapter 21

Chapter 22

Epilogue

endnotes

It’s Mine

Introduction

The ground on which

the creatures walk

Like most people going about their business in the early 2020s, concerned and dispirited by the pandemic and political polarization and the disturbing mutations of power wrought by social media, the emergence of a squealing baby called NFTs was a small bewilderment.

I was already deep into blockchain technology and its combustive innovations, having just finished a book with co-writer Simon Dingle called Beyond Bitcoin: Decentralised Finance and the End of Banks. But this new blockchain-borne species was a mote in the corner of my eye, lightly disturbing my view of the future. What were they doing? Who were these people paying seemingly irrational amounts for sometimes questionable collections of pixels on a screen?

It didn’t stop there. There was a continuing confusion of new amorphous shapes forming around crypto innovations – tantalizing hints of a new sort of Internet, opportunities to own a piece of immersive virtual worlds, new ways of using crypto to facilitate club membership, concert tickets and company ownership. Every major tech company was proclaiming, planning, spending. To say nothing of brands, all eager to understand how to monetize the cryptoverse and to claim land. And VC companies with their seemingly limitless coffers, sprinkling their capital liberally across hundreds of new companies – over $33 billion in 2022 from 200 funds.

The phrase ‘Cambrian Period’ immediately sprung to mind. A somewhat overused cliché that has been applied promiscuously, across wide swaths of historical observation. Fertile periods of innovation in technology, finance, political systems, science, arts or culture have often found themselves draped with this pithy phrase by one commentator or another. It is an easy borrow from the study of evolution; descriptive and vigorous.

One of the more concise definitions of the original Cambrian Period is ‘the time when most of the major groups of animals first appear in the fossil record’. It was a remarkably short period, at least when compared to the history of life, which is around 3.8 billion years, give or take. The explosion of life forms during the Cambrian Period took place during a tiny sliver of this time, a mere fifty-five million years.

The startling new innovations and their impact discussed in this book are less than fifteen years old. A Cambrian Period indeed.

And what has flowered within this period has been the undisciplined and wildly mutating offspring of modern cryptography, whose underlying plumbing was built by a subcult of researchers, programmers, mathematicians and amateur sleuths. Their labours birthed a revolution in 2009, and from that time on we have seen a truly dizzying array of both successful and failed experimentation that has captured the attention of everyone – tech heads, central banks, legislators, mainstream media, curious onlookers, aspirant participants and all manner of grifters.

Cryptography – the mathematics of secret-keeping. It’s been around for thousands of years, but of interest to us is the period fuelled by the release of the 2008 ‘whitepaper’ entitled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’, by the pseudonymous Satoshi Nakamoto, aided and informed by the aforementioned enthusiastic set of crypto-tinkerers stretching back to the 1970s.

And so, the blinking baby of Satoshi – the Bitcoin blockchain, and the subsequent supernovae of siblings and cousins and inbreeds, replete with bewildering new nicknames and monikers – cryptotokens, Defi, NFTs, the metaverse, Web3, DAOs, DIDs, soulbound tokens.

These wild and woolly new creatures were quickly staggering to their feet and knocking over long-established norms, but it was clear to me that something deeper was fuelling all of this energy. It was only partially to do with the much trumpeted features of public blockchain – decentralization, immutability, permissionlessness, trustlessness and the other shiny and somewhat arcane features of blockchains. Of course those were and are key to understanding the benefits of the underlying technology engine. But to me the blur of new blockchain projects and the parallel emergence of loud and bitter argument and insult in and around these new cryptofauna was camouflage for something more disruptive.

Books, blogs, podcasts, news outlets and courses offer how-tos and how-it-works and social impact analyses and economic musings and political filters about everything crypto. Social media overflows with commentary and contestation. We hear about the money-making opportunities and the displacement of ossified industries and sclerotic processes. But what is less apparent in all this cacophony is the individual, the citizen, the human at the end of the technology chain. You and me. And how our prospective immersion in these new technologies provides for something more personal and unprecedented.

And that is no less that the redefinition of the meaning of ownership in all its facets – identity, privacy, title, claim and transfer. And the rights and responsibilities attached to an individual who owns something.

Lest ‘ownership’ strike the reader as abstract, legal, even boring, consider this – it sits at the centre of civilization. It has been fuel for anger, jealousy, rage, wars, wealth, pride, peace, divorce, security and poverty since the beginning of humanity. There are people who own things and people who want to own those things. Either there is a peaceful transfer of ownership, or… theft, fraud, misappropriation, violence.

It could well be argued that we are what we own. At one time this was animals, wives, slaves, weapons, land, food. And then further up civilization’s chain – cars, houses, jewellery, stocks, bonds, art, books, cutlery, Nikes, tickets, shares, voting rights, our right to our bodily autonomy. Our lives are adorned with the things we own. In many ways, they define us.

Every new blockchain-based project, in every industry, across every genre sits on this foundation – the ability for something to be owned publicly or privately without dispute, and as a caveat, the ability for owned items to be bought, sold, lent or borrowed instantaneously on frictionless markets at fair value.

In this book we will take a look at this wide new landscape through this overarching prism of dynamic, elastic and non-counterfeitable ownership. A look closely at this progeny of blockchain:

NFTs have blazed a sensational trail through digital art and are beginning to tread on more conservative territories. NFTs, by definition, provide a secure title deed to a digital or even physical object, potentially infinite in its rules, but immutably tied to an owner.

Decentralized Finance – Defi – previously a playground of the most adventurous and technologically sophisticated of money-jugglers, is now starting to gain wider acceptance. At its core, the ability for the individual to create and own their own journey with their own money through the world of finance without delegating the task to the rent-extraction of banks, centralized exchanges and other middlemen.

Decentralized Autonomous Organizations – DAOs – are starting to challenge the traditional codifications of long-held formal structures that define everything from corporations to clubs, allowing individual participants to assemble, write and change their own rules of engagement.

The metaverse – originally a creation of science fiction, has seen tens of billions of dollars of risk money pour into its coffers, its promise also fuelled by the potential of personal ownership of items and its associated property rights within its infinite imagined worlds. Detractors observe that this is not new. But blockchain changes the metaverse ecosystem.

And of course, the OG: cryptocurrencies – no longer new or exotic, now that countries have started adopting them as legal tender, and governments have increasingly resigned themselves to their continued existence and beginning the process of building regulatory frameworks, forcing them, finally, to deal with privately owned money.

Web3 – an in-process ‘next’ Internet, is now nailing down its boundaries, at the centre of which is individual and immutable ownership of our personal interactions with the larger Internet ecosystem, giving us control of who may access, view, buy, sell our data, and under what conditions.

As we consider this personalized view of the growing crypto-economy and its many offshoots, we will also want to look at headwinds. Every new technology brings with it new opportunities for malfeasance, black swans, unintended consequences and painful shifts of power. A rewriting of the rules of ownership driven by cryptography is no exception – the headlines are already filled with dire warnings, misinformation, regulatory overreach and sensational stories of fraud and hucksterism. We need to dive in there too, and try to separate fact from fiction.

Most importantly, at least from my perspective, is how much fun this is. To return to our cliché borrowed from geological time – we are watching the evolution of a transformative techno-societal change in real-time. As long as we avoid the easy distractions of vast fortunes being made, lost or stolen, this is turning out to be a profoundly important human story.

And also, at the risk of repetition, so much fun to watch.

Explanatory Note

The shortest explanation of blockchain you will ever read, with almost no jargon

I resisted this. There are thousands and thousands of very good books and videos and podcasts and other online material about what a blockchain is and how it works. I didn’t want readers to get bogged down in this before we entered the more important world of ownership. But it must be done, because at least some will want a recap or even a first look. But I promise you that you can skip this introductory chapter if you want.

The following is an explanation of the Bitcoin blockchain specifically, but most other blockchains are similar in principle.

I will do the what first, and the why after.

What is the Bitcoin blockchain?

The blockchain is a database which contains a list of all Bitcoin payment transactions since its inception up until now.

It is replicated on thousands of computers who are unknown to each other, but if a majority agree that they are looking at the identical database, then that is the one definitive version of the truth. That makes it difficult to cheat, except with a prohibitively expensive coordinated effort to gain more than 50% colluding computers.

The list is divided into blocks of Bitcoin transactions that have happened between individual account holders. Like I give you ten Bitcoins. Then you give someone else five Bitcoins. And so on. There are about 2,000 transactions in each block in the blockchain.

Why blocks? Because it is easier to deal with than one long, never-ending stream of individual transactions; blocks are much more convenient.

Blocks of transactions are assembled in near real time and added to the end of the database as transactions are continually requested by account holders.

Each block is irrevocably mathematically chained to the previous history of blocks, all the way back to the very first Bitcoin transaction in 2010. Which means that no one can go back and change a transaction in history to their advantage, because the ‘chain’ of blocks is mathematically unbreakable. If someone tried, the mathematics would sound deafening klaxons and the attempt would be rejected.

Each account holder is identified by a number only. No names.

Only an account holder can withdraw and transfer their Bitcoins. Impossible for anyone else. Because the mathematics won’t allow it (we will explain this in more detail later in the book).

You cannot spend more than you have; the database calculates the current tally of savings of all account holders.

It is impossible to spend the same Bitcoin twice – each transaction is time-stamped.

The special computers doing the work of assembling blocks to keep it all in sync and operating are incentivized to do so using a little gift of Bitcoins from the blockchain. They are called miners. Thousands of other computers verify the miners’ work. Only one miner assembles each block.

Why is any of this important?

Because it means any account holder can pay any other account holder without anything sitting in the middle checking an account ledger (like a big bank computer that checks your balance before transferring money). This makes it fast and cheap and not reliant on trusting a bank.

Because no one knows who is paying and who is being paid. Remember, no names, only numbers. Account holders keep their privacy.

Because anyone can use it, no matter how rich or poor, documented or not, and be treated equally. This is not true of banks (try opening a bank account if you only have $20). It is the most inclusive monetary system in history.

Because mathematics makes the whole enterprise impossible to change or cheat.

Because there are no powerful humans anywhere in the system who can change anything or make questionable decisions (like printing more Bitcoin) beyond what is encoded in the system, it runs autonomously without managers, boards of directors or governments.

Yes, but really, why is this important?

Because the only other monetary system that has these properties is physical cash. And that is not your money. It is the government’s money. And they can print more, inflate it, debase it, or take it back (history teems with examples, including right now). And a cash transaction is relatively slow to conclude (both parties must be physically present, you take it out of your pocket, hand it over, wait for change), it is subject to theft and loss, it is pretty useless across national borders and it is bulky to store in large amounts.

The blockchain fixes all of that.

Replace ‘Bitcoin’ with ‘Cryptotoken’, and this same explanation covers much wider territory.

That’s really about it, save for a zillion details and decades of research and development.

Chapter 1

Ownership and its discontents

Ownership is a massive vessel, freighted with implication, swayed by legal currents, caught in the conceptual eddies that whirl around every use of the possessive – ‘my child’, ‘my house’, ‘my story’, ‘my body’, ‘my land’, ‘my language.’

Eula Biss

I love this description. I particularly love the repetitive simplicity of her use of that possessive ‘my’. In thinking about the overarching subject of ownership I took an unavoidable trip to various thesauri. It turns out that there are very few synonyms for ownership. If I own it, it’s mine. Not much more explanation needed.

Eula Biss is an award-winning non-fiction writer who, in 2020, wrote a book called Having and Being Had,¹ in which she ruminates on her discomfort at having just bought her first house. While trying to fill the house with stuff, she analyses our desire to own things, to possess. She questions whether this is not ruinous to our humanity, warping our attention that could be better spent elsewhere, like on human relationships.

I suspect she may be right, but the ‘massive vessel’ of ownership has been a constant companion of our species (and other species) for much of evolutionary history, and this book argues that it is on the precipice of redefinition, and perhaps even reimagination.

Once, when I was a skinny fourteen-year-old, a bunch of similar-aged friends had been given our first opportunity by our generous parents to go on holiday without them or any other adult. Rooms were booked at a hotel by the sea, we were given some spending money, instructed to call home every few days and delivered to the railway station, where we joyously boarded a train to the coast. To swim, to lie in the sun, to drink illicitly, perhaps to procure a joint or two, perhaps even to lose our virginity (which actually happened to my friend Brian, but not to me).

One of the little gifts from my mother for our oh-so-grown-up outing was a pair of sunglasses, expensive, branded, with a fancy little leather case. I had stared at myself in the mirror for many nights before we left, looking like a dashing aviator, I imagined. I would be irresistible to the objects of my desire, of that I was sure. God, I loved those sunglasses. It was my prized possession.

On the train my friends and I were in a sleeper cabin. Soon after we left, we met the residents of the next cabin. Older boys. From the wrong side of town. Big boys. Tough boys. They adopted us younger boys, and we wreaked havoc with noise and cigarettes and music. I was, of course, wearing my aviators, seeking to impress.

Which disappeared sometime during the night. And the leather case, which was on my sleeper bunk. Only to reappear on the acne-mottled face of the biggest tough a few hours later.

‘Oh,’ I said, ‘you’ve borrowed my sunglasses.’

‘Nah,’ he said with threatening demeanour, ‘these are mine.’

And that was that. I will return to this sad tale of ownership transfer, and the threat of violence that supported it, in a moment, but first we must take a short journey into human history. When did we first ‘own’ stuff? And who gave us permission to do so? And how did we prove it? There is an Alexandria’s library worth of research, opinion and fact on this subject. Splayed across disciplines, from law to anthropology to sociology to history to business.

The whole concept of ownership is not that hard to understand, at least on the surface. We have all seen a domestic dog growl at an encroachment on its food. Similarly, we have seen animals share food with offspring. Even more convincing to watch is small children, toddlers perhaps (including my own, some time back). If you’ve ever watched the bawling, choking, puce-faced expression of infinite injustice and pain when one sibling seizes the toy of the other, or the sweet sharing of a piece of cake cementing the bonds of affection, then it is easy to see how fundamental ownership is to our sense of morality and community and our understanding of possession.

And the codification of ownership, whose expression is so naturally evident in animals and children, has been an accompaniment to human societies for a very long time, at least since the time humans learned to write, and likely before.

One